Grifols
Note: This is a daily stock update and the information stands true as of 28/10/24, 09:00 CET.
Company Update:
According to El Confidencial, Brookfield hasn’t secured yet the funding it needs to bid on Grifols. According to the article, Brookfield needs €10bn to refinance part of Grifols debt and to purchase c 70% of the company. Therefore, the decision to formally go ahead with the bid will not be voted at the next board meeting as it was initially expected.
Expert Opinion:
Such a long delay in a bid that was supposed to happen was worrying. We now have one explanation for this delay. While this piece of news could weigh on the name over the short term, we remain firmly convinced there is a lot of value in the name. Business is doing fine and the balance sheet issues are now under control, meaning the likelihood of capital increase is low. If there is no capital increase, then the valuation is extremely compelling. As a reminder, the company trades on PE24, 25 and 26 of 13.6x, 10.0x and 8.0x respectively. Even in the absence of a bid, we believe the risk reward of Grifols is favorable.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach out to us at sales@alphavalue.eu
Company Update:
According to El Confidencial, Brookfield hasn’t secured yet the funding it needs to bid on Grifols. According to the article, Brookfield needs €10bn to refinance part of Grifols debt and to purchase c 70% of the company. Therefore, the decision to formally go ahead with the bid will not be voted at the next board meeting as it was initially expected.
Expert Opinion:
Such a long delay in a bid that was supposed to happen was worrying. We now have one explanation for this delay. While this piece of news could weigh on the name over the short term, we remain firmly convinced there is a lot of value in the name. Business is doing fine and the balance sheet issues are now under control, meaning the likelihood of capital increase is low. If there is no capital increase, then the valuation is extremely compelling. As a reminder, the company trades on PE24, 25 and 26 of 13.6x, 10.0x and 8.0x respectively. Even in the absence of a bid, we believe the risk reward of Grifols is favorable.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach out to us at sales@alphavalue.eu
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